EXCERPT: “Micro apartments are springing up all over Minneapolis, but developers of tiny units thus far have avoided the suburbs, particularly those as far out as Apple Valley. But one developer — Bigos Management — sees an appetite for small units in the far south metro. The company has pitched a two-building, 239-unit apartment complex just south of Kelley Park in Apple Valley, though some neighbors have objected. Golden Valley-based Bigos owns a 196-unit apartment building just north of the park and said there’s a 50-person waiting list to get into the one-bedroom units, far outpacing demand for two- and three-bedroom units. So Bigos wants to build nearly 50 units that have less than 579 square feet, with some as small as 434 square feet. Bigos told the city that the market is demanding more small units with better community spaces. That also means more density. The proposal calls for two five-story buildings with densities on par with projects like Excelsior & Grand in St. Louis Park and some of the student housing in Dinkytown near the University of Minnesota’s Minneapolis campus. At 60 and 67 units per acre, Bigos’s Parkside Village Gabella would easily be the most dense market-rate project in Apple Valley, with the next closest being 46 units per ace, according to city documents.” FULL STORY: http://bit.ly/2sf1XMn

EXCERPT: “CPM Co. is targeting low rent apartment seekers with its latest development on University Avenue. Finance & Commerce reports on the $8 million project, which will begin in September and have renters moving in by June 2018. The five-story, 51-unit apartment building, to be located at 401 University Ave., would be comprised of 36 studios and 15 one-bedroom units. The smallest unit would cost about $700 per month.” FULL STORY: http://bit.ly/2rcdXQp

EXCERPT: “Minneapolis Mayor Betsy Hodges called for “one Minneapolis” in her State of the City address late Tuesday morning . . . During the speech, the mayor said she heard from many Somali Minnesotans with large families who can’t find affordable housing. Hodges says the city is now transforming how it funds affordable housing in Minneapolis. ‘This is our next horizon: everyone housed, stably housed, with a range of housing options for all incomes in all neighborhoods,’ Hodges said.” FULL STORY: http://cbsloc.al/2rNyjNZ

EXCERPT: “Multifamily rents in the U.S. rose slightly in April, although the rate of growth fell below the long-term average, according to data compiled in the most recent survey of 121 markets by Yardi ® Matrix. Average U.S. rents rose $3 during the month to $1,314, an increase of 2% but well below the 5.5% growth rate of a year ago and the lowest year-over- year percentage increase since April 2011. The figures are expected, the report says, “given the rapid increase in supply and the inevitable return to growth that is more in line with income gains.” According to the report, “Rents have (in most metros and most segments) far exceeded the rate of income growth in recent years, when the number of renters increased rapidly while supply nosedived in the wake of the last recession. Now rents are peaking and have become difficult to afford for the average resident in many metros, while supply is at cyclical peaks.” Three California real estate markets led year-over- year rent growth in April: Sacramento, the Inland Empire and Los Angeles. Others in the top five were Minnesota’s Twin Cities and Seattle.” FULL STORY: http://bit.ly/2pNUjK8

Despite thoughtful and vocal opposition, the Minneapolis City Council failed to listen to residents, property owners and managers, who argued a new ordiance would add more regulation to Minneapolis rental housing likely adding to higher rents in a stable rental market.

The Minnesota Multi-Housing Association believes the ordinance, which mandates more inspections for apartments and longer wait times, could actually lead to fewer rental units that qualify for Section 8 subsidies and increased rents across the board because property managers believe the Minneapolis Public Housing current beauracracy makes the proposal unworkable.

Without warning, election year politics led to councilmembers Elizabeth Glidden, Abdi Warsame and Lisa Goodman expediting an ordinance first introduced two years earlier that would require all landlords in Minneapolis to accept government vouchers like those provided by the federal Section 8 program.

MHA launched a campaign opposing the ordinance as Minnesotans for Sensible Housing Policy which included online and social media ads, newspaper ads, and a website calling on the likely increase in rents once the ordinance is imposed.

“First, because of the rules involved in complying with the voucher program — landlords have to leave apartments unrented while waiting for inspections required before tenants using vouchers can move in — adds costs that landlords will want to recover in rents.

The second reason is because of the rent standards used by housing agencies to decide how much they will pay in vouchers. Landlords with rents near the rent ceiling might simply raise rents so as to exceed the standard and simply avoid the regulations. “The program is so broken that there’s an incentive for owners to price their apartments above the fair-market standard,” he said.

Those factors could lead to what the association dubbed “coastal rents,” akin to those in cities like San Francisco and New York.”

The Multi-Housing Association took out a full-page ad in the Star Tribune ahead of a planned public meeting. It said, in part:

“We know from the most highly regulated apartment markets in the country – New York and San Francisco – that more mandates mean higher rents and longer wait times to find an apartment.

In Minneapolis, the Minneapolis Public Housing Authority needs reform. A recent report outlined significant and numerous changes that MPHA needs to undertake – however the City Council wants to add additional burdens and bureaucracy to an agency that is already challenged and overwhelmed.

Meanwhile, Met Council and other local affordable housing agencies administer the same federal vouchers as the City of Minneapolis with less bureaucracy and without the mandates Minneapolis is proposing.

One recent study indicates that 84 percent of Minneapolis apartments are within $50 per month of being priced outside of participating in the program. More bureaucracy and mandates = coastal rents.”

At a public hearing March 22ndreported on by Minnesota Public Radio, Councilmember Glidden said, “If I go on Craigslist right now, I can promise you I will find multiple listings that say ‘No Section 8.’ That’s what we hope will change.” An assertion supported by testimony from tenants like Tracey Clark, a full-time college student and part-time mental health specialist who said, “I’ve been hung up on when I ask if people will take Section 8.”

The Hornig Companies owns and manages around 2,000 apartments in Minneapolis, and has some Section 8 tenants. Bernadette Hornig fears Glidden’s proposal will mean higher business expenses.

“I just don’t think this is the solution to the problem that they’re trying to address,” Hornig said. “I think it shows a pattern of mandates by the city of Minneapolis that make it really hard as a small business owner to conduct our business on a daily basis.”

“There’s inspections, there’s delays in the inspections, and delays in the service between us and the program, which causes loss of rent, and causes vacancy.”

Courtesy: KSTP-TV

Two days later, in a unanimous vote, the city council passed the ordinance. It will take effect in May of 2018. Multi-Housing Association President Cecil Smith told KSTP-TV, “the priority should have been reform of the housing choice voucher program.” The ordinance, he said, “could lower the opportunity for affordable housing in the city (and) exhilarate the gentrification of Minneapolis.”